QuickBooks 2009 Release 9 Step-by-Step Update Guide

I recently found an article online for which I was compelled to post a comment. The article basically said you need to make sure you know what software to purchase for use in your business before you buy it. I totally agree!

Here’s what I commented to the editor:

As an Advanced QuickBooks ProAdvisor at QuickTrainer Inc. in Wilmington, NC,  I agree with your comment:

“The point is, what cloud computing software does should not dictate what your business does,” says Parker. “You have to know what you need and sensibly adopt from there. It has to make sense.”

Before a business buys an accounting software package, they need to make sure it will do what they need it to do. We’ve run across several small businesses that have purchased the QuickBooks Simple Start version and quickly end up needing more capability than it offers.

Business owners: Do the due diligence before buying!

PLEASE, PLEASE, PLEASE make sure you know what you are buying before you buy. You can always go to the QuickBooks website and compare the different versions.

#ilm

There is a great feature within QuickBooks which has been around seemingly forever, yet I find it is often overlooked. This feature gives you the ability to memorize transactions. Why is this useful? Suppose you have recurring monthly transactions which draft from your checking account. Memorize the entry that reflects this transaction once; schedule the memorized transaction to post on a certain day of each month. Then, when you are reconciling your bank statement this charge, which you typically forget to enter, will be present.

But let’s not stop there. There are so many various types of transactions in which you can use this feature. Ok, so about this scenario? You have a client(s) who you invoice monthly (or quarterly, etc.). No need to create the same recurring invoices each month. Memorize them, schedule them to automatically post each month and that’s once less task for you.

I even use this feature for bills; even though the bill amount may change, I find having the entry memorized and posting automatically a time saver still. I just go into the bill, change the amount and I’m done.

You don’t have to have the transaction post automatically. You can use memorized transactions on an as needed basis.

Check to be Memorized

So how do you memorize transactions? Let’s suppose you have an American Express payment of $4.95 that drafts from your account each month on the 14th. Enter a check (or find a previous transaction for this charge) that represents this expense. Once you have it looking like you want it (in other words, you are ready to click “Save and New”), right click in the check writing area and select, “Memorize Check”. The “Memorize Transaction” screen will appear.

Memorized Transaction Dialog Box

Give the transaction a logical name. Next, decide how you want this memorized transaction to behave. In other words, do you want QuickBooks to remind you when it is time to enter this transaction (Remind Me)? Or, will you use this transaction only when you need it (Don’t Remind Me). Or, would you like QuickBooks to automatically enter the transaction (Automatically Enter)? If you select, “Remind Me” or “Automatically Enter”, you will then enter the frequency and the date of the next entry. If you are dealing with a definitive number of entries remaining for a transaction (e.g., a car note with 35 payments remaining), enter the number. If you want the transaction to post, say, 5 days prior to the date in which the transaction hits your account, fill in the number of days in advance. Finally, click, “OK”. Your transaction is now saved and ready.

So you’re thinking, “that’s great, but what if I want to edit the memorized transaction; how do I find my memorized transactions?” Simply go to “Lists” and select “Memorized Transaction List”. Right click the memorized transaction you wish to change and select “Edit Memorized Transaction”. You might notice you can also delete a memorized transaction when right clicking on the transaction.

Don’t forget…memorize!

#ilm

With almost every new client I visit I find there is a lack of knowledge in what parent/child accounts are and how they are meant to be used.

First, let me explain what I am discussing. This topic specifically involves the Chart of Accounts within QuickBooks. I say “Specifically” because there are other lists in which parent and child accounts apply. The “Parent” account is simply the top level account. It’s the one in charge, so to speak. The “Child” account is a sub-account of the parent. You should understand that “Child” or “Sub” accounts mean the same thing as they relate to this discussion.

For instance, the example below shows the parent account (6200) with four child accounts (6210, 6220, 6230, 6240) beneath.

6200 - Auto & Truck Expenses
       6210 - Auto & Truck Insurance
       6220 - Auto Maintenance & Repairs
       6230 - Gas/Fuel
       6240 - Vehicle Registration & Tax

What is the purpose of this structure? It’s really quiet simple. The “Parent” account sums the individual “Child” accounts. As a result, you should never post anything to the parent account. Rather, ALL transactions should be posted to the proper child account. When viewing various reports (e.g., Profit & Loss, Balance Sheet), if you notice an account with “- Other”, there is a VERY good chance someone has posted a transaction(s) to the parent account.

To resolve such an instance, simply drill down into the “- Other” account and re-select the proper child account. If you discover the available child accounts do not lend themselves to posting this transaction, then you should create a new child account.

If you have questions or comments on the above, feel free to leave a comment and I’ll respond.

#ilm

Greetings and Happy New Year!

This posting is about actions you can (and should) take now in order to prepare your businesses financials to go to your CPA for your 2008 tax return.

The new year brings exciting opportunities and challenges. One of those challenges might be getting your QuickBooks financial data in order for your business. If you’ve been tracking your financials throughout the year (like all business owners should do), then the amount of energy which needs to be expended will be minimal for this task. If, however, you have been procrastinating then STOP IT! Let 2009 be the year you get your financial accounting house in order. No excuses permitted!

If you don’t have the time, QuickTrainer offers bookkeeping services. If you don’t know how (but want to learn), QuickTrainer offers QuickBooks Classes or One-on-One Training. Regardless, make a decision now and make that decision your first order of business (and New Year’s resolution)…To outsource bookkeeping or learn the bookkeeping portion of your business. Either way, take a proactive step now.

With the above in mind, what follows are some very specific things you can do now to get ready. Of course, this only applies if you like saving money with your CPA. One more thing: as you read and digest the information below, keep in mind, we are here to help you! Call us or email us if you have any questions:

1. Account Reconciliations - Make sure all bank and credit card accounts are reconciled to the penny as of year-end. Business bank statements typically end on the last day of the month. Credit card statements have varying closing dates. As a result, make sure you reconcile the January statement. Of course, this first task cannot be accomplished until you have your bank statement(s) ending 12/31/08 and your January credit cards statement(s). If you find when reconciling that your opening balance does not match the statements opening balance, STOP and give us a call.
2. Make a Copy - When you do the above reconciliations take the time to make a copy of the front page of each statement. Your CPA will want this to verify these accounts have been properly reconciled. Also, if you have made any major capital purchases in 2008, say greater than $1K, make a copy of the sales receipt or invoice for your CPA. This does not include purchases of product for resale.
3. Want to know one of the best things you can do for yourself, your CPA and anyone whom you desire to review your books? I want you to really pay attention to this advice! It will save you thousands of dollars during the duration of your business. Are you ready? ALWAYS, always, AlWaYs…put a brief and succinct memo in EVERY transaction you record. Check, bills, deposits, etc. should always contain a brief memo which describes, “What is this expense?” or “what is the source of this revenue?”. Do NOT cheat in this area. It will help you when you are looking at a transaction months from now. It helps your CPA (or us at QuickTrainer) when you have a memo. By our understanding what the purpose is, it tells us if the transaction has been recorded to the proper G/L account. If not, we can correct the transaction quickly. Assuming the transaction is in the correct G/L account, we can move on with confidence.
4. As you review each General Ledger (G/L) account found on your Balance Sheet and Profit & Loss statement, look for accounts which have ” - Other” in them. This is a typical indicator that transactions have been recorded to a parent G/L account. The rule for QuickBooks is whenever you have sub-accounts (a.k.a., child accounts) you never post ANY transaction to the parent account. The parent account serves as a mean to SUM the transactions with the sub-accounts.
5. W-2/W-3 - If you have employees (personnel in which you withhold federal, state, social security and Medicare taxes on, a.k.a., payroll taxes) and you are responsible for providing them with a W-2, make sure you are prepared to do this sooner rather than later. Do you have a current Form W-4 and Form I-9 on file for each employee? Do you have all employee social security numbers recorded in their QuickBooks employee profile? Do you have their current address? Are you confident your payroll items are setup properly? When printing a W-2 for your employees and your records, don’t forget to include a W-3. The W-3 is a summary of all W-2’s. It gets filed along with Copy A of your W-2’s and is to be mailed to the Social Security Administration. NOTE: DO NOT FOLD OR TEAR COPY A OF YOUR W-2′S. SAME THING APPLIES TO THE W-3. When you are ready to send Copy A and the W-3, place them in an 8-1/2 x 11 envelope.There is no need to purchase your W-2’s/W-3. It is now acceptable (and has been for about 3 years) to print these forms on plain paper. Don’t forget to sign, title and date your W-3. You need to mail (or personally hand-out) your W-2’s on or before February 2^, 2009. Encourage your employees to compare their final 2008 dated paycheck to their W-2. It is important to correct any errors prior to March 2, 2009. The W-3, along with Copy A of your W-2’s need to be mailed on or before March 2, 2009.
6. 1099’s/1096 - If you have subcontractors who performed work for you in 2008 you are obligated to provide each person a 1099 reflecting the compensation they were paid. However, this need only apply to persons or businesses in which you know they are not incorporated, or whom you have any doubt as to if they are actually incorporated. To help with this decision, and to make sure you have the proper paper work on-hand, you should have (actually should already have) a signed Form W-9 on file. The Form W-9 is a form whereby the subcontractor provides you with their proper name, address, tax id number and indicates they are exempt from your withholding any federal taxes. If a subcontractor uses their social security number, then you know they are not incorporated. However, you can be a sole proprietor, yet still have a federal tax id. Again, if you are not certain about the legitimacy of any subcontractor being legally incorporated err on the side of caution and send them a 1099. In QuickBooks, your subcontractors must be setup and paid as “Vendors” (NOT Employees). Additionally, you must have each subcontractors address, tax id and the box checked in QuickBooks which reads “Vendor eligible for a 1099″. Also, you must tell QuickBooks the specific G/L accounts to look in for 1099 subcontractor vendors. The only accounts which should be considered are those which relate to “Compensation”, not reimbursed expense. Finally, if a subcontractor was paid more $600 or more in compensation, then QuickBooks knows to produce a 1099. If a subcontractor was paid less than $600, QuickBooks will not create a 1099. This is how it should be, as $600 is the threshold.
7. With regards to #5 and #6 above, be sure to make a copy of your employees W-2’s, your W-3, your subcontractors 1099’s and your 1096. Your CPA will want a copy to verify your numbers.
8. The next several topics deal with a review of your Balance Sheet for the year. You should ensure you are looking at the Balance Sheet on an accrual basis (yes, even if you file your return on a Cash basis).
9. Accounts Receivable (A/R) - If you create invoices, and any invoices are unpaid, you will see “Accounts Receivable” on your Balance Sheet. Check this balance against the balance on an A/R Aging Report. Do they agree? If not, I will share with you, one of the most common reasons for these reports to not agree has to do with Unapplied Payments (i.e., payments received but not posted to an invoice). Call us for help with this issue.
10. Undeposited Funds - As of 12/31, there should be no ($0) undeposited funds on the Balance Sheet. If you do have undeposited funds showing, it is typically the result of deposits made, but post dated for the next year. If you have checks you have received in late December, but simply have not gone to the bank yet to deposit these funds, and do not plan on going to the bank until early January, you still need to record the deposit as of 12/31. The IRS takes the position of the fact that you had access to these funds in the current year. Just because you did not make it to the bank, does not excuse one for not recognizing the revenue in the year in which the checks were received. Of course, this would only be an issue for Cash Basis accounting.
11. Fixed Assets - If you have made purchases this year greater than “X” (where “X” is to be determined by your CPA, or otherwise use a guideline of $250) which have a durable life, then these purchases should be found in a Fixed Asset account. Most commonly, this includes purchases such as land, building, leasehold improvements, furniture, fixtures, equipment or tools, computer hardware, computer software, office equipment and vehicles. You should NOT include product for resale (as this would be found in an Inventory Asset account or a Cost of Goods Sold account) or if you purchased a large amount of a consumable (e.g., Office Depot had a great deal on paper, so you purchased $700 worth). Finally, unless you record the depreciation of assets yourself on, say, a monthly or quarterly basis, you should not have anything posted to Fixed Asset accounts utilized to reflect depreciation.
12. Accounts Payable (A/P) - If you enter bills (and you should) and have bills which are still unpaid, you will see “Accounts Payable” on your Balance Sheet. Check this balance against the balance on an A/P Aging Report. Do they agree? If not, much like the A/R notes mentioned prior, one of the most common reasons for these reports to not agree has to do with Bill Payment Checks created to pay a bill but then the amount of payment on the check does not match the original bill (because it was later changed for some unknown reason - don’t do this) or the bill was deleted (again, don’t do this) for some unknown reason. Again, call us for help with this issue.
13. Credit Cards - We have already discussed the reconciling of credit card accounts in #1 above. While looking at your Balance Sheet, you should not have ANY credit card accounts reflecting a credit balance, unless you really did overpay a credit card total balance.
14. Sales Tax - This is one of the areas most often abused by people who don’t know better. The bottom line is this, whenever a taxable item is used on an invoice or sales receipt, sales tax is accrued in the Sales Tax Payment liability account. When it’s time to pay your sales tax, you should create a Sales Tax Payment check, not a regular check. Therefore, drill down into the Sales Tax Payment account. The only transactions you should find are invoices, sales receipts, credit memos, an occasional sales tax adjustment entry and sales tax payment checks. Call us for help with this if you find other transaction types.
15. Payroll Taxes - Much like sales tax above, this is another area frequently misunderstood. Paychecks create the payroll tax liability. Liability checks are used to pay these liabilities. Any other transactions amongst your payroll tax liability accounts, with the exception of an infrequent payroll liability adjustment, is unacceptable and going to cause you issues with proper balances. Personally, I like to separate the various payroll liabilities into their own separate G/L account. This allows me to, at a glance, see (a) if the company social security and employee social security are in balance with each other, (b) if the company Medicare and employee Medicare are in balance with each other and (c) if there are any payroll liability accounts showing a credit balance. If so, do I understand why? Finally, your CPA will want to have copies of your payroll forms filed throughout the year. These include: 941’s, 940, NC-5, NCUI101.
16. Business Loans - This includes business loans from banks, car loans, mortgage loans, a line of credit, a loan from Uncle Tiger or a loan from Shareholder (think S-Corp), Member (LLC) or Owner (Sole Proprietor). Most of these loans provide you with a monthly statement reflecting interest and principal balance. While these type loans can be reconciled monthly, just like a bank or credit card account, it is most often acceptable to conduct an annual reconciliation only utilizing the last statement of the year. Assuming your prior year’s opening balance was correct, simply enter your year-ending principle balance, make sure the date reflects the statement date and then continue by clearing all principle payments. Any remaining difference is likely going to be the result of principle and interest payments not being recorded properly. A simple journal entry can be made to correct this difference, whereby (most often) the loan account reflecting the principle balance is credited for the difference and an interest expense account is debited. NOTE: Let me caution you to say the above is a typical or common scenario. There could be other issues causing a discrepancy. Call us for help if you have any doubts about this topic. When it comes to loans from a shareholder, member or sole proprietor, simply make sure the balance outstanding is correct. I too frequently find these loans have a credit balance. This can be where payments have been made for the repayment of a loan, but the actual original principle balance was never recorded. Finally, if you have made a personal loan of your funds to your business (which is very common), ensure you repay yourself for this loan before taking Profit Distributions or Draws. This way, you avoid any federal and state taxes being paid on these distributions or draws.
17. Equity - Within the equity section of your Balance Sheet, you will most commonly find balances for Capital Stock, Additional Paid in Capital, Distributions or Draws and Retained Earnings. These accounts seldom have transactions posted against them, with the exception of distributions or draws. Capital Stock would only see a change if something happened to the business such as a partner coming in or leaving. It would TRULY be an exception to have ANYTHING posted to Retained Earnings.
18. This concludes the Balance Sheet review. Next, we move on to a review of your Profit & Loss Statement for the year. You should ensure you are looking at the Balance Sheet on an accrual basis (again, even if you file your return on a Cash basis).
19. Income - Within the income section of your P&L, you will typically find Invoices, Sales Receipts, Credit Memos, and an occasional Payment (perhaps reflecting where a discount was given through the Receive Payment functionality). However, I realize some people bypass invoicing and sales receipts, etc. and simply record Deposits. If this is you, then you would certainly have “Deposits” recorded within your income section. Checks would be more of an exception than the rule. The exception most frequently occurs when the business writes a refund check to a customer or client. There are some other unique scenarios whereby checks might appear, but these are considered beyond the scope of this blog.
20. COGS (Cost of Goods Sold, a.k.a., Cost of Sales) - Within these accounts you will find products you resell, subcontractors who generate revenue for your business, wages of employees who generate revenue and perhaps Merchant Service Fees along with shipping, postage and materials related to shipping and postage. When reviewing the details of these numbers, if you spot transactions that don’t fall within the above, it likely means the transactions have been recorded to the wrong account and should be moved. In other words, you only wish to have those transactions which are directly associated with a direct expense relationship incurred in order to generate revenue for your business.
21. Expenses - While reviewing the details within your various expense accounts, you are simply making a determination: do each of these transactions reside in the proper G/L account? Remember #3 regarding memos? These memos are going to go a long ways toward helping you make this decision. If you see a check in Office Supplies for $777.77 and the memo says, “Laura’s new laptop”, you know this check has been recorded to the wrong G/L account. It should be recorded to a Fixed Asset account (e.g., 1840 - Computer H/W). If you find a bill to Progress Energy sitting in the G/L account, “6710 - Books & Publications” you know this transaction is likely in the wrong account.
22. Last Year’s Tax Return - Another area often overlooked is ensuring your last year’s QuickBooks financials (in which a tax return has already been filed) ties to the actual tax return. This is sometimes done by your CPA. QuickTrainer provides this service for all of our bookkeeping clients. Why is this important? Your CPA cannot conduct an accurate tax return if this is not done. Again, call us if you have questions regarding this matter. Setting a Closing Date and a Closing Date Password in QuickBooks is a GREAT way to make sure no prior year transactions change once your business data has been submitted for a tax return. This is imperative to your success and saving yourself money.

While this blog posting certainly does not include every conceivable scenario, I have attempted to layout for you some very common areas to review. I hope you find the above information helpful this year and in years to come.

Again, Happy New Year!!

Jim
QuickTrainer, Inc.

#ilm

Continuing along the theme of the Chart of Accounts, I’m often asked, “What is the best manner to convert my COA to the one used by QuickTrainer?” Along these same lines, I’m often asked, “How can I use the QuickTrainer COA when I setup my new QuickBooks file?” The answer to each of these two questions deserves two separate responses.

Converting your COA to our format requires numerous steps. Though the steps required are not difficult, it might be said this action is for the more experienced user. The steps I follow when conducting this conversion are as follows:

1. Make a backup of your QuickBooks data. Making a backup of your QuickBooks data should ALWAYS be a standard operating procedure anytime you are making drastic changes to your data.
2. Delete every account in which QuickBooks will allow. NOTE: QuickBooks will NOT allow an account to be deleted if the account is tied to ANY transaction, or is associated with ANY Item within QuickBooks. Therefore, this action is completely safe. To determine if an account can be deleted, highlight an account, and then while holding down the “ctrl” key, press the letter “d” (this sequence of keystrokes is a standard QuickBooks keyboard shortcut and is also known as Ctrl + A). Again, perform this action on every account.
3. Next, make sure QuickBooks is configured to include account numbers. To check this preference setting, click on “Edit”, “Preferences”. Then click on “Accounting” and then “Company Preferences”. On this screen you will the option, “Use account numbers”. Make sure this box is checked. Then click, “Ok”. NOTE: You must be logged in as the Admin in QuickBooks to perform this action.
4. From here, beginning at the top of the accounts, edit each account assigning each account the proper name and number. For a list of the proper names and numbers, click here http://www.quicktrainer.biz/images/qti/downloads/coa.pdf to download a PDF file of the Chart of Accounts used by QuickTrainer. I personally find the above method works well on the asset, liability, equity, income and cost of goods accounts. However, once you encounter the expense type accounts, I recommend changing the approach slightly. The reason is you are likely to encounter numbers already in use by other accounts.
5. To remedy this, I suggest editing each expense type account and removing the numbers associated with each of these accounts. Next, begin assigning the proper numbers to the existing accounts.
6. At this point, you should have the proper account number and name for each of your existing accounts. However, you are likely missing some very useful accounts. To remedy this, continue to the next step.
7. Right click here http://www.quicktrainer.biz/images/qti/downloads/coa.iif and select, “Save Target As”, to download QuickTrainer’s COA.IIF file. This is a file comprised of the majority of the accounts found in QuickTrainer’s standard COA. Download this file to your desktop. Next, open this file using Excel. When opening in Excel, accept the default messages and the file will open without issue.
8. Now here’s the trick. In order to eventually be successful with the importing of the missing accounts, you need to rid the COA.IIF file of all accounts which already exist in your QuickBooks file. Otherwise, each time an import is attempted, the import process will come to a halt when it encounters a duplicate name or number. To solve this, print a list of your existing COA.
9. To print this list, click on “Reports”, “List”, “Account Listing”. The only columns you should keep are, “Account”, “Type” and “Account Number”. Now, print your list.
10. Comparing the COA.IIF file, opened in Excel, to your printed list, remove all rows from Excel found on your printed list. Once done, from within Excel, click on “Save”. Click, “Yes” when prompted to save. Then, close Excel. When prompted with, “Do you want to save the changes you made to COA.IIF”, select, “NO”.
11. You are now ready to import your COA.IIF file into QuickBooks.
12. To do so, from within QuickBooks, go to, “File”, “Utilities”, “Import”, “IIF Files…” Navigate to the location where you stored your IIF file (Desktop, if you followed the directions above). Select your file and choose, “Open”. If all goes well, your accounts within the COA.IIF file will be imported. If, by chance, you left an already existing account in the COA.IIF file, you will receive an error on line “x”, where “x” is the number of the line within Excel. In this case, re-open the COA.IIF file, and delete the subject offending row PLUS all rows above the offending line, with the exception of the very first row (which is the header row).

While it is very possible to import the COA.IIF file, described above, in its entirety, the more simple approach is to email us (info@quicktrainer.biz) and we will email you back a QuickBooks portable file which already contains the subject COA. Think of this file as a blank canvas, with which you can simply restore, giving it the file name of your choice and begin working.

#ilm

I’m often asked, “how do you establish the ‘QuickBooks opening bank or credit card balance’ when the balance is something other that $0?”

This situation occurs when a business has operated in the past, perhaps has filed a prior year tax return, but is just beginning to use QuickBooks and does not desire to capture the prior year(s) transaction activity.

Follow the steps outlined below carefully and you will succeed in properly establishing your QuickBooks opening balance:

What you will need:

• Your bank or credit card statement, ending January 31st (or a date very close; i.e., 29th, 30th). NOTE: Credit Card statements typically do NOT end on the last day of the month. Therefore, you will want the first January statement.
• An understanding of what checks, debits and deposits were written, charged or deposited in the prior year but did not clear until January (or later).

The Steps:

1. Enter ALL checks, debits and deposits from the prior year, dating them on the date the transaction occurred. This date WILL be a date in the prior year. This step will give you a partial bank balance.
2. Go to the QuickBooks reconciliation screen (click on “Banking”, “Reconcile”). Ensure you have the proper bank or credit card account displayed. The “Beginning Balance” will be $0.
3. The Statement, Service Charge and Interest Earned dates should be set to December 31st of the prior year. In the case of a credit card, set these dates to the ending dates of your last December statement.
4. In the “Ending Balance” field, type in the Beginning Balance found on your bank or credit card statement. Remember, we are working to establish the QuickBooks opening balance, in this case, for the month of January. In the initial reconciliation, we will NOT clear ANY transactions on the January bank statement. This will occur after we have reconciled and established a QuickBooks opening balance which reflects your bank’s opening balance.
5. Click “Continue” to continue with the reconciliation process. Assuming your opening balance is a positive number, you will make a Journal Entry debiting the bank or credit card account and crediting your Retained Earnings account. NOTE: It is highly unusual to post ANYTHING to the retained earnings account but this is an exception to this rule.
6. To make the journal entry, click on “Company”, “Make General Journal Entries”.
7. Date the journal entry for December 31st of the prior year.
8. Make sure the “Adjusting Entry” is NOT checked.
9. Under “Account”, enter the bank or credit card account you are reconciling.
10. Next, in the Debit column enter the Beginning Balance on your statement. This is the same balance you entered earlier in the reconciliation screen window for Ending Balance.
11. In the Memo column, type in something like “To establish account opening balance”.
12. Now, go back to the “Account” column below the entry line you just made. Type in the account number for “Retained Earnings”.
13. The credit column should already contain the same number you entered earlier in the debit field for your first line. Do NOT change this number. The Memo column should read the same as the first line.
14. Click on “Save & Close”. When you see the screen below, click “Ok”.
15. Now, return to the reconciliation screen. Within this screen you will see an entry as the result of the journal entry you just made. It will be on the right hand (deposit) side.
16. Click on the “Check Mark” column to place a check mark in this column, therefore “Clearing” this transaction. Afterward, you will see in the right bottom portion of the reconciliation window that the difference will reflect 0.00. If not, something has been missed above. If the difference is 0.00, click on “Reconcile Now”.
17. When prompted, click on “Summary” and then “Print” to print a summary reconciliation report.

That’s it! Now you can reconcile each subsequent month because your statement’s opening balance will now match QuickBooks’ opening balance.

I have been using the 2009 version of QuickBooks for about one month to keep my personal records and also for a few clients who have already upgraded to that version.  I purposely waited to comment on the version so that I could give an honest assessment.  Now that I have had a chance to use many of the new features, I would like to share my experience with those considering the upgrade.

Let me begin by saying, I do not work for Intuit… however, I am a huge fan of QuickBooks software because everyday I see the crucial role it plays in the businesses of my clients!  Although in my opinion QuickBooks is the best financial software available for small to medium size businesses, there is always room for improvement!  Intuit has apparently been listening to its’ users and has answered with several exciting changes in the 2009 version!

I am frequently asked by my clients, “Should I upgrade to 2009?” and “What’s the benefit to my business if I do decide to upgrade?”  At this point, my answer is YES… if I were a business owner I would want to be using this version of QuickBooks and here is why…

First, QuickBooks 2009 now has an exciting accountant data review tool that will help your accountant, bookkeeper, or consultant keep your financials in tip top shape!  Let me just say that these tools will SAVE YOU MONEY by saving them time in analyzing your data files.  It makes it possible to quickly analyze your financial data and easily make corrections.  This will keep small errors from becoming bigger problems!  As tax season approaches, I suggest that if you are thinking about upgrading, now is a great time so that you can reap the benefits of the new review process this year!  QuickTrainer already offers this service to their clients and is excited about being able to enhance the service even more!  You can also check with your accountant to see if they will be offering this service.

Another change within the 2009 version is the new sort feature within bank reconciliations.  I have personally wished for this many times in the past and am thrilled to be able to use it now!  It will save you lots of time during your monthly reconciliations!!

Also, this seems like a small thing, but I can’t tell you how many times I have been affected by this.  Have you ever been working away in your QuickBooks file, closing open windows, and suddenly you realize you’ve actually clicked on the wrong “X”?  Now your whole company file is shutting down and you have to take the time to reopen QuickBooks and bring back up everything that you were working on.  Well that never has to happen again!!  With the new version, when you accidentally click that “X”, you will get a question that says “are you sure?”  Yea for second guessing!!

QuickBooks 2009 has a new tool called Company Snapshot that I think is very useful!  It gives you essential information on the health of your business at a glance.  It shows all of your bank, credit card and loan balances and has sections that show who owes you and who you owe.  It even gives you a chart of income and expenses over a period of time to help you recognize trends.  You will always know how your business is doing!  All this information can be customized and organized in the way that you want to see it.  I personally like to set the Company Snapshot as my home page so that I have all this critical information in one easily accessible location.

A few other changes that I want to mention are major improvements to online banking; the ability to use multi-currency; multi-user enhancements and Time Tracker, which allows clients to track time by employee, service and customers within QuickBooks.  With the Pro and Premier 2009 version you can even utilize a new free website for your business with a simple drag and drop interface.

I truly hope that this overview of the changes to QuickBooks in 2009 helps you in deciding if, or when, you should upgrade your company file to this version.  I can personally attest to it’s usefulness and believe there will be great benefits for my clients who decide to use it!

Happy Bookkeeping!, Kim

#ilm

Please, please, please…heed this advice. I’ve seen it too many times in my QuickBooks Consulting career. A client is cruising along day-to-day using his or her QuickBooks data: invoicing, entering bills, analyzing various reports. THEN…

Bam! It happens.

They sit down at their computer one day and something is not right. The computer is slow or non-responsive. They are unable to access the QuickBooks data or any other data on their computer. The bottom line is, the hard drive has died; bit-the-dust!

This is a painful day and, in this day-and-time, so very unnecessary. Now I know what you may be thinking. “Why not just make a backup to a CD or a thumb drive?” Well, I will admit, this approach is better than nothing (though also often ignored). In that scenario, a regular habit of doing so would be advantageous. However, what if something more catastrophic occurs? What if your place of business is burglarized? Or, what if your place burns to the ground? Unless you are extremely disciplined with making daily backups and then taking these backup offsite with you, you may still suffer through additional pain and suffering; again, so very unnecessary in this day-and-time.

What are your options?

There are a plethora of service vendors who offer online backup. You should also know that you are NOT limited to just backing up their QuickBooks data with any of these service providers. You are allowed to backup other critical files on your computer too. Below are just a few of the service providers with which I have experience:

QuickBooks Online Backup Service

This is a service I have personally used for years for my personal QuickBooks data and other critical files.

As of this writing, QuickBooks offers users a 30 day free trial. While they do require a credit card, your card will only be charged if you opt not to cancel within the first 30 days. The price of this backup option is $4.95/month or $49.95/annually. At this price, you are offered 1GB of online storage capacity. While QuickBooks hopes you will need additional storage capacity (they sell 10GB for $149/annually), I personally have found 1GB to be sufficient for my needs.

QuickBooks Online Backup Service offers the end-user a scheduling utility. This approach lets you select the files to be backed up and also allows you to schedule the days of the week to backup (I prefer Monday through Sunday) and the time the files are to be backed up. Set the scheduler and you can pretty much forget about it after that. After completion of your backup, you are greeted with a dialog box indicating, “x Number of Files Successfully Backed Up” (where x represents the number of files you have selected for backing up).

In order to be successful with this tool, your files cannot be open when the backup occurs. This fact applies to almost all backup tools. If a selected file is open, all unopened files are backed up and the file that was left open is skipped. Additionally, the computer conducting the backup must be turned on when the backup occurs. So, if like me you schedule your backup for overnight, make sure you close all your files and keep your computer on. Click here to get your QuickBooks Online Backup Service now.

Carbonite

I began using Carbonite for my business data in March of 2007. I have opted for this tool to backup all data in the “My Documents” folder of my computer as well as some other mission critical files elsewhere on my computer.

As of this writing, Carbonite offers users a 15 day free trial and they do NOT require a credit card. Rather, when your trial expires a message from the service in your system tray notifies you that your trial has expired and you need to take action if you want to continue to have your data backed up. The price of this backup option is $49.95/annually or $89.95/two years. At the above prices one is NOT limited to data size. This is one feature which sets Carbonite apart from other backup service providers. Whether it’s 1GB, 10GB or more, Carbonite will back it up.

This solution allows users to select what files and/or folders to backup via the Windows Explore tool. From within Explore, simply right-click on a file or folder and select Carbonite and then select “back this up”. The initial backup, Carbonite tells you, can take 1 - 3 days to complete. My experience has been about 1 day. After the initial backup, Carbonite waits until your computer is idle and then begins backing up files which have changed. Click here to get your Carbonite Online Backup now.

Again, I encourage you. If you are not currently backing up your data online, do not put this off a moment longer. If you do, it may not be today, tomorrow or next month, but odds are it will happen to you eventually. You WILL loose your precious data.

I’m often asked, “What is the best manner to convert my COA to the one used by QuickTrainer?” Along these same lines, I’m often asked, “How can I use the QuickTrainer COA when I setup my new QuickBooks file?” The answer to each of these two questions deserves two separate responses.

Converting your COA to our format requires numerous steps. Though the steps required are not difficult, it might be said this action is for the more experienced user. The steps I follow when conducting this conversion are as follows:

1. Make a backup of your QuickBooks data. Making a backup of your QuickBooks data should ALWAYS be a standard operating procedure anytime you are making drastic changes to your data.

2. Delete every account which QuickBooks will allow you to delete. NOTE: QuickBooks will NOT allow an account to be deleted if the account is tied to ANY transaction or is associated with ANY Item within QuickBooks. Therefore, this action is completely safe. To determine if an account can be deleted, highlight an account and then, while holding down the “ctrl” key, press the letter “d” (this sequence of keystrokes is a standard QuickBooks keyboard shortcut and is also known as Ctrl +A). Again, perform this action on every account.

3. Next, make sure QuickBooks is configured to include account numbers. To check this preference setting, click on “Edit”, “Preferences”. Then click on “Accounting” and then “Company Preferences”. On this screen you will see the option “Use account numbers”. Make sure this box is checked. Then click “Ok”. NOTE: You must be logged in as the Admin in QuickBooks to perform this action.

4. From here, beginning at the top of the accounts, edit each account while assigning each account the proper name and number. For a list of the proper names and numbers, click here to download a PDF file of the Chart of Accounts used by QuickTrainer. I personally find the above method works well on the asset, liability, equity, income and cost of goods accounts. However, once you encounter the expense type accounts, I recommend changing the approach slightly. The reason is you are likely to encounter numbers already in use by other accounts.

5. To remedy this, I suggest editing each expense type account and removing the numbers associated with each of these accounts. Next, begin assigning the proper numbers to the existing accounts.

6. At this point, you should have the proper account number and name for each of your existing accounts. However, you are likely missing some very useful accounts. To remedy this, continue to the next step.

7. Right click here and select “Save Target As” to download QuickTrainer’s COA.IIF file. This is a file comprised of the majority of the accounts found in QuickTrainer’s standard COA. Download this file to your desktop. Next, open this file using Excel. When opening in Excel accept the default messages and the file will open without issue.

8. Now here’s the trick. In order to eventually be successful with the importing of the missing accounts, you need to rid the COA.IIF file of all accounts which already exist in your QuickBooks file. Otherwise, each time an import is attempted the import process will come to a halt when it encounters a duplicate name or number. To solve this, print a list of your existing COA.

9. To print this list, click on “Reports”, “List”, “Account Listing”. The only columns you should keep are “Account”, “Type” and “Account Number”. Now, print your list.

10. Comparing the COA.IIF file opened in Excel to your printed list, remove all rows from Excel found on your printed list. Once done, from within Excel, click on “Save”. Click “Yes” when prompted to save. Then, close Excel. When prompted with “Do you want to save the changes you made to COA.IIF”, select “NO”.

11. You are now ready to import your COA.IIF file into QuickBooks.

To do so, from within QuickBooks, go to “File”, “Utilities”, “Import”, “IIF Files…” Navigate to the location where you stored your IIF file (Desktop, if you followed the directions above). Select your file and choose “Open”. If all goes well, your accounts within the COA.IIF file will be imported. If, by chance, you left an already existing account in the COA.IIF file, you will receive an error on line “x”, where “x” is the number of the line within Excel. In this case, re-open the COA.IIF file, and delete the subject offending row PLUS all rows above the offending line, with the exception of the very first row (which is the header row).

The best way to setup a new QuickBooks file which includes the QuickTrainer Chart of Accounts is to simply email us at info@quicktrainer.biz. While it is very possible to import the COA.IIF file described above, in its entirety, the more simple approach is to email us and we will email you back a QuickBooks portable file which already contains the subject COA. Think of this file as a blank canvas, with which you can simply restore, giving it the file name of your choice and begin working with.

What is it? What do I do with it? And why do I care? These are good questions. Let us begin by defining what the Chart of Accounts (COA) is.

According to Wikipedia, the COA is a list of all accounts tracked by a single accounting system and should be designed to capture financial information to make good financial decisions. Each account in the chart is assigned a unique identifier, typically an account number. Each account in the chart is classified into one of the five categories: assets, liabilities, equity, income and expenses. I would add one additional category to this list; Cost of Goods Sold. Though I am confident the Wikipedia definition included COGS within the expense category, I like to break it out on its own.

Allow me to simplify the above as it relates to QuickBooks. Suppose you are writing a check. When you bring up the check writing screen, a default bank account will appear, meaning this is the bank account in which you plan to write this check from. The primary place you need to be aware of the COA is when you go to record the “what is this purchase for?” In other words, is this purchase for Office Supplies, Rent, Auto Maintenance & Repairs, Expensed Computer H/W, etc.?

QuickTrainer uses a standardized COA for each and every client for which we (a) setup, (b) cleanup or (c) perform Bookkeeping Services. When I say “standardized”, you should interpret this as meaning 99% of all accounts you will ever need. There will always be some customizing done to the COA depending on the business type and the subjectivity of the business owner(s). This typically includes the manner in which income and cost of goods sold accounts are configured. Using the QuickTrainer COA, you will quickly see our structure uses both account numbers and account names and is laid out in a very logical manner.

If you want to save money with your CPA and put a smile on his or her face at the same time, click here to download a PDF file of the Chart of Accounts used by QuickTrainer.

Happy Accounting!!!